Japan's PM Kan Wins Party Vote, Pushing Yen to 15-Year High
Unlike Ozawa, who would have considered more debt if the economy worsened to fund more stimulus, Kan, 63, has promised to curb spending and cap borrowing to rein in huge public debt -- twice the size of Japan's $5 trillion economy. He also advocates raising the 5% sales tax to fund the growing social welfare costs of a fast-aging population, Reuters reported.
Kan, who has been at Japan's helm for about three months, is the nation's fifth prime minister in less than four years. His victory means that Japan will be spared yet another leadership change.
But since Ozawa was considered more likely to take action to combat the strength of the yen, as the BBC reports, traders immediately drove it higher. The U.S. dollar fell from ¥83.60 before the results of the party election were announced to as low as ¥83.07, with the yen hitting a fresh 15-year high. The dollar later recouped some of its losses to trade at ¥83.40.